The Role of Multinational Oil Companies in World Energy Trade

Abstract

During and after the 1973-1974 oil crisis, it appeared to some observers in the importing countries that multinational oil companies were contributing to the success of the exporting countries. Political leaders from many importing countries claimed that the major oil companies supported the oil embargo by the Organization of Arab Petroleum Exporting Countries (OAPEC) and the oil price increases of the Organization of Petroleum Exporting Countries (OPEC). To counter OAPEC and OPEC, the governments of several importing countries intensified their efforts to bring the oil companies under national control. Canada, Great Britain, Norway, and the U.S., for instance, imposed price controls, trade restrictions, and other measures to reduce the autonomy of the companies. In addition, in the U.S., several legislators introduced bills to sever or circumvent supposed company ties to the exporting countries. The future role of the companies may be significantly different from their past role, and will be determined by the relative strengths and interests of the three main groups of market participants. To the extent that multinational oil companies are strong or flexible enough to operate independently from exporting and importing-country pressures, the behavior of the companies will reflect their own interests and the structure of themore » international petroleum industry. To the extent that the interests of the multinational oil companies coincide with or can be made to coincide with the interests of the exporting or importing countries, the companies will operate in ways that benefit nations on one side or the other of the international petroleum market. Accordingly, this review examines the relative strengths and interests of multinational companies, exporting countries, and importing countries from the perspective of each in turn. 13 tables, 1 figure, 36 references.« less